Vancouver-based miner Wheaton Precious Metals (TSX:WPM) and South African metal miner Sibanye (JSE: SGL) (NYSE:SBGL) closed a deal July 24 which will see Weathon buying all gold production from the Stillwater and East Boulder mines in Montana.
Wheaton has paid $500 million in cash upfront, which will be followed by subsequent payments equal to 18% of the spot gold and palladium prices until the advanced payment is reduced to nil. After that, Wheaton will pay Sibanye 22% of the spot gold and palladium prices.
The transaction, Sibanye said, immediately reduces the company’s leverage and net debt.
Wheaton's estimated proven and probable gold reserves have now increased by 410,000 ounces and its inferred gold resources by 920,000 ounces.
For the first time, the Canadian firm has estimated proven and probable palladium reserves of 610,000 ounces and inferred palladium resources of 430,000 ounces.
Wheaton's announcement follows a similar deal it signed last month with Brazil's Vale (NYSE: VALE) to buy cobalt mined after 2021 as a by-product from its Voisey’s Bay mine in Canada's northern Labrador region.
